NFC Update: VeriFone’s Latest Move Should Jumpstart Google Wallet’s Deployment
Near field communication (NFC) technology is finally getting the attention it deserves.
As we’ve discussed several times already, NFC chips have a lot of potential. Most notably in the mobile industry, where a chip embedded in your phone can turn the device into a virtual credit card.
Now, Samsung (SEO: 005930) has integrated the technology into its Galaxy S II and the soon-to-be released Galaxy Nexus. I’ve even been seeing a lot more “Google Wallet Accepted Here” signs crop up in the Washington, D.C. area.
But Google’s certainly not alone anymore…
Microsoft (Nasdaq: MSFT) and Sony (NYSE: SNE) recently inked deals with Google’s NFC chip partner, NXP Semiconductors (Nasdaq: NXPI). Plus, LG (NYSE: LPL), Acer (TPE: 2353), Nokia (NYSE: NOK) and Research In Motion (Nasdaq: RIMM) are on board, as well, according to NFC Rumors.
However, despite all of this progress, some NFC critics are still predicting the technology’s demise. They think infrastructure is the reason.
You see, although more handset makers are waking up to NFC’s potential, retailers have yet to do the same. The problem is, special payment terminals are required to process NFC purchases. And smaller businesses have had a difficult time adapting.
Lucky for Google (and the rest of the NFC newcomers), payment powerhouse, VeriFone’s (NYSE: PAY), recent acquisition should be enough to quiet those remaining critics and bring NFC to the masses.
A New Technology From An Old Favorite
If you’ve ever purchased an item with a credit card, you’ve likely seen the name VeriFone before. The company develops the payment terminal technology that you swipe your card through.
More importantly, VeriFone is an official partner of Google’s NFC initiative. It currently manufactures the Mastercard (NYSE: MA) PayPass systems and a portable card reader accessory that accepts NFC payments.
On Tuesday, the company announced that it’s acquiring mobile payment startup, GlobalBay.
GlobalBay develops a mobile card reader, too. But its specialty is software. The move gives VeriFone three key upgrades: Businesses can track inventory in real time, create customer shopping profiles to more easily connect with clientele and take the mobile checkout process anywhere in the store.
So it should boost VeriFone’s terminal technology to the next level. And with VeriFone’s dominant and trusted position in the industry, boasting about a 50% marketshare, small business owners are more likely to warm up to the idea of incorporating the new NFC infrastructure from a trusted brand.
But the best part is that it gives VeriFone instant access to GlobalBay’s customer base. Which means companies like Guess (NYSE: GES), Timberland, True Religion (Nasdaq: TRLG), Crocs (Nasdaq: CROX), Whole Foods (Nasdaq: WFM), Gymboree and Hallmark will be posting a “Google Wallet Accepted Here” sign, too.
Bottom line: VeriFone’s recent acquisition of mobile payment startup, GlobalBay, will ramp up NFC adoption and help Google Wallet reach its goal of mass market appeal. And since the move strengthens VeriFone’s grasp in the rapidly growing mobile transaction industry, it has the potential to drive the company’s shares higher, as well.